Can Private Insurers Fix Medicare and the Budget Deficit?

Introduction

The House Republicans are putting forward a plan, drafted by Representative Paul Ryan, chairman of the House Budget Committee, to cut federal spending by $4 trillion over the next decade.

Central to that plan is a proposal to end traditional Medicare, which now directly pays most of the health care bills for elderly and disabled Americans. It would turn Medicare for those currently under 55 into a "premium support" plan where beneficiaries would choose a private insurer and the government would provide subsidies to pay the premiums, about $15,000 a year, with bigger payments for those who are poorer or sicker.

Is such an approach a good idea? Is it feasible? Can it help reduce costs?